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LOGISTICS

Return to Article: Improving Logistics and Inventory Control

Logistics providers should offer secured system applications that can be seamlessly integrated to manage inventory control and resource planning. Examples of such applications are Oracle, SAP, and Microsoft products with support-system applications. Choosing a logistics provider can be simplified by looking for key performance indicators. Common indicators include the following:

• Receiving dock-to-stock cycle times is measured in hours rather than days.
• Order processing is measured in order of completion with or without back orders.
• Processing occurs within defined cutoff parameters, and product is tendered for transportation on the same day.
• Inventory accuracy is measured via cycle count or physical wall-to-wall inventories as defined by the manufacturer.
• Data exchange should be in real time or file transfer.
• Defined requirements for delivery is measured by actual receipt of shipment instead of by the estimated time of arrival.
• The damage-free report is measured by number of units in shipments processed.

A logistics provider should be able to deliver 90% of receipts to stock within an eight-hour work window. With regard to order processing, a specific plan should be in place, such as shipping of 99% of receipts on the same day with a defined cutoff time of 2 p.m. for normal shipments and 4 p.m. for emergency order downloads. Orders after these cutoff times are subject to transportation carrier cutoffs and usually fall into the next day’s business. Indicators also include inventory and cycle count accuracy of 98% of receipts and order delivery of 98% of receipts that were on time (meaning within a 15-minute window of the defined date and time).